HKMA probe of foreign banks finds no proof of forex rigging

An investigation by the Hong Kong Monetary Authority failed to show evidence that traders at 10 foreign banks successfully rigged foreign exchange markets, the de facto central bank said in a statement yesterday.

But the HKMA announcement revealed Hong Kong-based traders at Deutsche Bank and Standard Chartered tried unsuccessfully to manipulate currency fixings to their advantage.

The probe, launched in mid-October, investigated communications such as instant messenger dialogues at those two banks, as well as at Bank of America, Barclays, BNP Paribas, Citibank, HSBC, JPMorgan Chase, Royal Bank of Scotland and UBS.

"The HKMA investigation found no evidence of collusion among the banks investigated and no evidence of any rigging of the benchmark fixing of Treasury Markets Association (TMA) FX rates in Hong Kong," the statement said.

But it did uncover a failed 2009 attempt by a Deutsche Bank trader to influence the USD/HKD spot rate. The HKMA said a Hong Kong-based trader asked an overseas colleague to influence the rate in order to gain an over-the-counter currency option.

A spokesperson at the German bank said it had fully complied with the regulators' investigation but declined to say whether it had detected the incident at the time or if the trader still worked at the bank.